Spain Delays Signing Onto Desertec Sahara Solar Project

Spain delayed signing onto a pact that would have cleared the way to build the first 600 million- euro ($768 million) solar plant in a network of generators envisioned to stretch across the Sahara desert.

Germany, France, Italy, Malta, Luxembourg and Morocco support plans to export renewable energy in the form of sun power via cables under the Strait of Gibraltar to Europe while Spain’s agreement is pending, according to a statement today.

The memo of understanding Spain hasn’t agreed to would have allowed Desertec Industrial Initiative GmbH to move forward with a 150-megawatt plant in southern Morocco to be built with the Moroccan Agency for Solar Energy.

“I am confident that the governments will sort out the negotiations,” Paul van Son, chief executive officer of Dii, said today at the venture’s third annual conference in Berlin. “The MOU will be a big step forward as it would bring renewable energy across borders from Morocco to Europe.”

Three years after the founding of Dii, the initiative that wants to generate electricity from the sun from Egypt to Morocco, it’s still waiting construction of its first project.

The whole project, which may total as much as 400 billion euros in investments by 2050 should all that’s planned come to fruition, would help satisfy North Africa’s energy demands amid a growing population and provide cash for economic development, according to the Desertec initiative.

The Munich-based company’s shareholders include utilities such as EON AG and RWE AG. (RWE) Deutsche Bank AG, UniCredit SpA (UCG) and Munich Re, also shareholders, would help finance the project while Dii wants to obtain state-backed grants and loan guarantees to entice more investment.

Desert Power

The Germany-led initiative envisions a network of solar- thermal plants feeding electric grids both in Africa and Europe. The plants would have mirrors concentrating sunlight on heating liquids that spin turbines. Photovoltaic generators and wind turbines also will be worked into the project.

Desert power from North Africa and the Middle East could cover about two-thirds of the region’s energy needs and provide as much as 15 percent of Europe’s demand by 2050, according to the Dii initiative.

Dii favors Morocco for the first plant because the nation has a government that backs renewable energy, van Son said in October 2011. Morocco is linked to Europe via two undersea cables stretching 25 kilometers (15.5 miles) across the Strait of Gibraltar with a free capacity of 400 megawatts to 1,000 megawatts, van Son said.

Dii was dealt a blow on Oct. 22 when Siemens AG (SIE) pulled out of the venture and closed its unprofitable solar business.

To contact the reporter on this story: Joseph de Weck in Berlin at jdeweck@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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